China to invest billions in port infrastructure

China says it is ready to invest tens of billions of dollars in ports along its proposed “21st-Century Maritime Silk Road”, a trade route snaking through Southeast Asia all the way to Venice by way of South Asia, Africa and the Middle East. The government has created a new Chinese development bank and separate infrastructure fund, to help support its trading relationships in Asia and Europe. Using its US$40-billion Silk Road Fund, the Chinese government intends to “break the bottleneck in Asian connectivity by building a financing platform,” China President Xi Jinping said during the APEC summit. The Silk Road initiative will focus on improving land and waterborne trade connectivity in Central Asia and South Asia by upgrading roads, railways, ports and airports. Writing in East by Southeast, analyst Brian Eyler argues that the ultimate objective of the new Silk Road is to further open up trade with Africa. “One way to understand the Maritime Silk Road is to envision a network of exporters formed of commercial interests from China and advanced economies in Southeast Asia sending manufacturing and food exports to Africa’s growing markets while importing valuable minerals and metals from African trading partners. China’s initiative is being watched with concern by the United States and Europe, according to reports. Reuters market analyst John Kemp, writing in his personal capacity, says “the Silk Road fund and Asia Infrastructure Investment Bank pose a direct challenge to the traditional primacy of US-dominated financial and trade institutions in the region, including the International Monetary Fund, World Bank and Asian Development Bank. “Just as access to American markets and capital was once a key component of US diplomacy, China is now employing its financial and trade muscle to win friends and inf luence,” he writes. CAPTION An Asian Development Bank report estimates that Asia as a whole needs as much as US$730 billion per year in infrastructure investment before 2020.